On July 2, 2024, the CFPB released the Summer 2024 Edition of its Supervisory Highlights that notes recent supervisory findings in auto and student loan servicing companies, debt collectors, and other financial services providers. The findings included in the report cover examinations in the areas of auto and student loan servicing and debt collection, including credit card debt collections, as well as credit card account management with a focus on medical credit cards that were completed from April 1, 2023 to December 31, 2023.
Highlights of the report include the following findings by the examiners of the CFPB:
Servicers did not provide adequate notification that borrowers were required to make their final payments manually then illegally charged the borrowers late fees for failing to make the final payment on time.
Certain servicers had excessive phone hold times, their call centers were significantly understaffed, they had problems with their interactive voice response systems, and some consumers were prevented from accessing online account management portals. In addition, servicers provided inaccurate information about forms borrowers need for loan programs with certain benefits such as forbearance.
Debt collectors, including student loan debt collectors, did not provide validation notices within five days of their initial communication with borrowers, as required.
Examiners uncovered instances of collectors using aggressive or verbally abusive language, including to consumers unable to pay due to a recent hospitalization. In other cases, debt collectors communicated with consumers at times and places known by the collectors to be inconvenient or unusual despite being asked to stop by consumers.
There was a significant number of consumer complaints regarding how dentists and other healthcare providers promoted, offered, and sold medical credit cards to consumers while misrepresenting the specifics of “deferred interest” promotions.
CFPB examiners found unfair practices in how some institutions communicated with consumers about account freezes related to the review deposit and prepaid account activity to identify fraud or other suspicious activity.
Read the CFPB’s news release here.
The CFPB’s Summer 2024 Supervisory Highlights can be found here.